In fiscal 2016, we announced the launch of Project Centennial, a comprehensive business and operational review. We identified opportunities to enhance revenue growth, streamline operations, improve efficiencies, and make investments that strengthen our competitive position and improve margins over the long term. We began Project Centennial with an evaluation of our brands, product mix, and organizational structure. Most importantly, Project Centennial marked a significant shift in mindset from a sales and operations focused enterprise to a brand focused, consumer focused packaged foods company. Strategic priorities developed as part of Project Centennial were designed to improve margins and profitably grow revenue over time. These priorities included: reducing costs to fuel growth, developing leading capabilities, reinvigorating core business, and capitalizing on product adjacencies.

Today, we have an organization dedicated to the consumer. We are hyper-focused on growing our brands and committed to real innovation to drive growth, with a renewed sense of passion about cost management. We have updated the strategic priorities to include the following:

Focus on brands: Enhance relevancy and expand presence. This objective is to invest in our brands to align brands to consumers to maximize our return on investment. We expect to incur significant incremental marketing costs annually for brand development. These costs will not be restructuring and will be recognized as incurred.

The company operated under an organizational structure established with two business units (“BUs”), Fresh Bakery and Snacking/Specialty since May of 2017, and realigned key leadership roles. This structure also provided for centralized marketing, sales, supply chain, shared-services/administrative, and corporate strategy functions, each with more clearly defined roles and responsibilities. On July 17, 2020, the company implemented additional organizational structure changes designed to increase focus on brand growth, product innovation, and improving its cake operations. Elimination of the BUs and adoption of a brand focused

organization structure was completed in the third quarter of fiscal 2020 and the company continues to report our financial results in one operating segment. See Note 1, Basis of Presentation, of Notes to Condensed Consolidated Financial Statements of this Form 10-Q for a description of our segment presentation.

Prioritize margins: Optimize the portfolio and supply chain. The company incurred $1.3 million and $0.9 million of employee termination benefits charges related to a voluntary employee separation incentive plan (the “VSIP”) in the second and third quarters of fiscal 2020, respectively. All payments under the VSIP are expected to be paid by early fiscal 2021. Additionally, in the third quarter of fiscal 2020, the company announced an involuntary reduction-in-force plan (the “RIF”) and recognized charges of $5.2 million. These charges consisted primarily of employee severance and benefits-related costs and were recorded in the restructuring and related impairment charges line item on our Condensed Consolidated Statements of Income.

During the second quarter of fiscal 2020, the company entered into a contract to sell three closed bakeries currently included in assets held for sale and certain idle equipment at other bakeries included in property, plant and equipment, resulting in the recognition of $4.6 million of impairment charges. The sale of these assets is anticipated to be completed during the fourth quarter of fiscal 2020. Additionally, in order to optimize our distribution network, we vacated certain distribution depots during the third quarter of fiscal 2020, some of which are owned and others that were leased. This resulted in the recognition of lease termination charges and lease impairment charges totaling $13.5 million in the current quarter. In order to optimize sales and production of our organic products, the company decided to cease using the Alpine Valley finite-lived trademark, resulting in a $4.6 million impairment charge in the second quarter of 2020. These costs are recorded in the restructuring and related impairment charges line item on our Condensed Consolidated Statements of Income as referenced in the table below.

The company recognized impairment charges related to manufacturing line closures in the first quarter of fiscal 2019 and for a closed plant recorded in assets held for sale during the second quarter of fiscal 2019. The plant is being sold to streamline our core operations. In the third quarter of fiscal 2019, the company announced the closure of an additional bakery and recorded asset impairments on property, plant and equipment. Additionally, we recorded a gain related to a facility which had been previously impaired in a prior year. These costs are recorded in the restructuring and related impairment charges line item on our Condensed Consolidated Statements of Income as referenced in the table below. The company continues to explore additional opportunities to streamline our core operations, but as of October 3, 2020, we cannot estimate the additional costs expected to be incurred for this initiative.

Smart M&A: Disciplined approach to acquisitions in baked foods that enhance our branded portfolio and margin profile.

The tables below present the components of costs associated with Project Centennial and include the consulting and third-party implementation costs related to the project for the twelve and forty weeks ended October 3, 2020 and October 5, 2019 (amounts in thousands):

	For the Twelve Weeks Ended		For the Forty Weeks Ended
	October 3, 2020		October 3, 2020
Restructuring and related impairment charges:
Impairment of trademark	$	—	$	4,636
Impairment of property, plant and equipment		611		5,245
Employee termination benefits		5,996		7,261
Lease termination and lease impairment charges (1)		13,493		13,493
Restructuring and related impairment charges (2)		20,100		30,635
Project Centennial consulting costs (3)		5,068		14,044
Total Project Centennial restructuring and implementation costs	$	25,168	$	44,679

	For the Twelve Weeks Ended			For the Forty Weeks Ended
	October 5, 2019			October 5, 2019
Restructuring and related impairment charges:
Reorganization costs	$	—		$	253
Gain on bakery sale		(833	)		(833	)
Impairment of assets		3,881			5,663
Employee termination benefits		229			959
Total restructuring and related impairment charges (2)	$	3,277		$	6,042

The tables below present the components of, and changes in, our restructuring accruals for the forty weeks ended October 3, 2020 and October 5, 2019 (amounts in thousands):

	VSIP			RIF			Employee Termination Benefits⁽¹⁾			Reorganization Costs⁽²⁾		Distribution Network Optimization			Total
Liability balance at December 28, 2019	$	174		$	—		$	1,450		$	—	$	—		$	1,624
Charges		2,184			5,226			(149	)		—		2,213			9,474
Cash payments		(1,642	)		(4,714	)		(1,075	)		—		(2,213	)		(9,644	)
Liability balance (3) at October 3, 2020	$	716		$	512		$	226		$	—	$	—		$	1,454

	VSIP		RIF		Employee Termination Benefits⁽¹⁾			Reorganization Costs⁽²⁾			Distribution Network Optimization		Total
Liability balance at December 29, 2018	$	174	$	—	$	227		$	—		$	—	$	401
Charges		—		—		959			253			—		1,212
Cash payments		—		—		(644	)		(253	)		—		(897	)
Liability balance (3) at October 5, 2019	$	174	$	—	$	542		$	—		$	—	$	716